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Total revenue of MXN$194.8 billion ($15.6 billion) improved 1.6% year over year and was slightly above the Zacks Consensus Estimate of $15.1 billion. Excluding the negative impacts of currency fluctuations, total revenue grew 10.0% on strong contributions from key markets across the globe.

Segment wise, Service revenues were MXN$174.3 billion ($14 billion), down 0.6% year over year on currency fluctuations. However, excluding the impact, service revenues grew 7.8% driven by mobile data services and PayTV. Within this wireless service revenues segment, mobile data revenues rose 17.4%.

Equipment revenues were MXN$20.5 billion ($1.6 billion), up 25.6% year over year on the growing demand for smartphones and tablets.

Total costs and expenses in the reported quarter increased 3.5% year over year to MXN$129.8 billion ($10.4 billion).

Quarterly EBITDA dropped 2.1% year over year to MXN$65.0 billion ($5.2 billion). EBITDA margin dropped 120 basis points year over year to 33.4% due to increased costs associated with the networks in Mexico and Brazil along with higher costs related to infrastructural development of wireless and wireline bases due to increasing post-paid and PayTV subscribers.

Subscriber Statistics

America Movil’s total subscriber base reached 328.8 million in Jun 2013, up 5% year over year. Of the total, wireless and fixed-line subscribers were 262 million and 66.8 million, representing year-over-year growth of 4.1% and 9.1%, respectively.

Results by Prime Regional Segments

Quarterly revenues from Mexico, America Movil’s home ground, grew 4.7% year over year to MXN$69.6 billion ($5.4 billion). Mexican ARPU (average revenue per user) decreased 2.5% and the churn rate deteriorated 0.1% year over year.

Revenues from the Brazilian operation climbed 8.0% year over year to BRL8.1 billion ($3.9 billion). Brazilian ARPU fell 5.3%, while churn rate improved 0.4% year over year.

America Movil’s U.S. operation (Tracfone) saw a 37.3% year-over-year growth in revenues to reach $1.5 billion. ARPU increased 19.2% year over year, while the churn rate remained flat year over year.

Liquidity

At the end of the second quarter, America Movil had around MXN$31.5 billion ($2.5 billion) of cash and cash equivalents compared with MXN$45.5 billion ($3.6 billion) as of Dec 31, 2012. Long-term debt was around MXN$401.1 billion ($32.2 billion) compared with MXN$404.0 billion ($31.9 billion) at the end of 2012.

We believe America Movil has a strong grip over the Latin American wireless market with consistent subscriber growth. Increased penetration of 4G mobile services and a competitive pricing policy are expected to boost the company’s growth prospects.

Further, America Movil is concentrating on expanding the PayTV platform, which remains one of its highest revenue contributors. America Movil’s various collaborations with other firms will likely enhance its networks within Latin America as well as in offshore key markets such as Asia and the Middle East.

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